Statutory municipal charges on property can bind transferees unless they prove bona fide purchase without notice.

Arrears of consolidated rate under the Calcutta Municipal Act, 1899 create a first charge on the premises, subject only to prior land revenue, because the statutory scheme treats the premises as security for the municipal dues distinct from the owner's personal liability. A statutory charge does not transfer ownership, but it burdens the property and follows it into the hands of transferees. The charge may be resisted by a purchaser for value without notice only if that special defence is pleaded and proved. On the stated facts, the purchasers failed to establish bona fide purchase without notice, so the municipal charge remained enforceable against the property.

---

---

Issues: (i) Whether arrears of consolidated rate under the Calcutta Municipal Act, 1899 constituted a first charge on the premises. (ii) Whether such charge could be enforced against the property in the hands of purchasers claiming protection as bona fide purchasers for value without notice.

Issue (i): Whether arrears of consolidated rate under the Calcutta Municipal Act, 1899 constituted a first charge on the premises.

Analysis: The statutory scheme distinguished between the personal liability of owners and purchasers for arrears and the liability of the premises themselves for the rate. The provisions governing assessment, collection, distress, purchaser liability and suit showed that these were separate matters. The provision declaring the consolidated rate to be a first charge on the building or land used plain language making the rate a charge upon the premises as arrears accrued, subject only to prior land revenue.

Conclusion: Arrears of consolidated rate were held to be a first charge on the premises.

Issue (ii): Whether such charge could be enforced against the property in the hands of purchasers claiming protection as bona fide purchasers for value without notice.

Analysis: A charge does not transfer an interest in the property, unlike a mortgage. The owner remained full owner notwithstanding the statutory charge, so the transferee took the full title but subject only to the incidents attaching to a charge. The charge could not be enforced against a transferee who purchased for value without notice, but the defence had to be established by the transferee. On the facts, the purchasers had not pleaded or proved that they were bona fide purchasers without notice, and the circumstances were such that they could have discovered the arrears on enquiry from the municipal authorities. The vendor's position did not improve their title.

Conclusion: The charge was enforceable against the appellants, and they were not entitled to protection as purchasers for value without notice.

Final Conclusion: The statutory arrears remained attached to the property and the appellants' title did not defeat the municipality's right to enforce the charge, so the appeal failed.

Ratio Decidendi: Where a statute expressly creates a first charge on immovable property for municipal dues, the charge attaches to the premises as a matter of law and may be enforced against transferees unless they establish the special defence of purchase for value without notice.

---